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2013 Judge Wizmur - Opinions

Judge Judith H Wizmur -- Opinions signed in 2013

The debtor sought to avoid, pursuant to 11 U.S.C. § 522(f), several liens asserted against his principal residence and a second parcel of real property. The court determined that two of the liens were statutory tax liens and were not subject to avoidance under section 522(f). The court granted the debtor’s motion as to the three remaining liens on the debtor’s principal residence as they impaired his homestead exemption and were thus avoidable. Those same liens remained enforceable on the debtor’s second parcel of real property because the debtor did not assert and was not entitled to claim an exemption on that property. Absent an exemption that could be impaired, section 522(f) was not available to avoid the liens in question. The debtor’s motion was denied as to his second parcel of real property.

The debtor/defendant moved to reopen his Chapter 7 bankruptcy case and to vacate an order, entered four and a half years earlier, granting summary judgment on collateral estoppel grounds to the plaintiffs on the nondischargeability of their claim under 11 U.S.C. § 523(a)(2)(A). The debtor argued that the court’s order was no longer equitable in light of the court’s subsequent determination in another case involving the same underlying state court litigation. The court found that the two cases were factually intertwined, but not identical. The fact that a different result was achieved against the plaintiffs’ claims in another case did not represent a significant change in either the factual conditions or the law, and it was not detrimental to the public interest for purposes of Rule 60(b)(5). The debtor had ample opportunity to seek reconsideration of the grant of summary judgment, or to appeal the decision by this court, but failed to do so. Moreover, Rule 60(b)(6) could not be used as a back door mechanism to obtain reconsideration of an adverse decision, absent extraordinary circumstances which were not established on this record. Alternatively, the court determined that the debtor’s motion was not filed within a “reasonable time” as required by Rule 60(c)(1), and that the plaintiffs had relied upon this decision for the last four and a half years and would be greatly prejudiced if they had to retry this matter at this late date. Because the motion was untimely, and because extraordinary circumstances had not been shown to warrant the relief sought, the debtor’s motion was denied.

The Chapter 13 debtors sought to expunge a proof of claim filed on behalf of an alleged assignee of credit card debt owed by one of the debtors. The debtors asserted that the claim was unenforceable under state law because there was no evidence of a clear assignment attached to the proof of claim and no proof that notice was given to the debtors of the purported assignment. The court determined that because the proof of claim met of the all filing requirements under recently revised Rule 3001, it was entitled to a presumption of validity. Because the debtors failed to produce any evidence to rebut the presumption, the debtors’ motion to expunge was denied.

A tax sale certificate holder sought relief from the automatic stay to continue with the sale of the debtors’ principal residence, acquired by the movant through a prepetition foreclosure judgment and writ of possession. The debtors sought instead to cure the outstanding amount due for their real estate taxes through their proposed Chapter 13 plan, and to recover their home as either a preferential transfer under 11 U.S.C. § 547 or as a fraudulent transfer under 11 U.S.C. § 548. The debtors’ challenges to the underlying state court judgment were denied under the Rooker-Feldman doctrine. The court determined that the debtors had standing pursuant to § 522(g) and (h). Because the transfer occurred outside of the 90 day period, the debtors could not prevail on a preference action. Focusing on § 548, the court determined that application of the BFP v. Resolution Trust Corp. decision did not automatically equate the value received under a tax sale foreclosure with reasonably equivalent value. The court distinguished tax sale foreclosures of the debtor’s equity of redemption under New Jersey state law, where there is no actual sale, no notice requirements to third parties, no auction procedures, and no other exposure to the marketplace, from mortgage foreclosures and from BFP. The creditor’s motion for relief was denied without prejudice, subject to the debtors’ successful prosecution of an adversary proceeding under § 548.